Lumber Prices Continue to Price Home Owners — and Builders — Out of the Market
Lumber prices increased 14.9% in August, marking the largest four-month gain since such data was first recorded in 1949 and the second-largest gain since seasonally adjusted data became available in 1975. Such a sharp increase has put unnecessary pressure on home owners and builders alike to figure out how to close the gap.
Former NAHB Chairman Randy Noel, a custom home builder from LaPlace, La., received a lumber quote early this month for more than $28,000 — twice what he had paid for the same lumber on a comparable project in February 2019. Oriented strand board alone, which Noel’s company uses frequently in its projects, had increased from $7.50 per sheet to $26 per sheet.
Because the homes have already been sold, Noel is looking toward alternative building materials, such as steel, to help minimize the cost increases. Not all builders will be able to close the gap, though.
“I know builders who have had to call customers and give them their deposit back and say, ‘I can’t build your house because of the price of lumber,’” he shared. “People already have their loan secured and can’t increase the price.”